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ZCCM-IH reports group profit of over 240% in 9 months

Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH) posted impressive nine-month results from September 2019 to June 2020, recording profits of over 240% from K128 million (September 2019) to K 438.9 million (June 2020).

According to highlights of unaudited half year financial results of directors for ZCCM-IH and its subsidiaries for the period ended June 30, 2020, Group profits are the result of an increase in net financial result of ZMW 138.7 million registered in September 2019 at 327.3 million ZMW registered in June 2020.

The increase in financial income is due to foreign exchange gains recorded on foreign-denominated assets resulting from the depreciation of the Zambian Kwacha, which fell from an average of ZMW 13.9,000 per US dollar as at September 30, 2019 to ZMW 17.2,000 to the US dollar as of June 30, 2020.

“Increase in the Group’s profit share in associated companies, from ZMW 154.8 million in September 2019 to ZMW 354.7 million in June 2020. This is mainly due to the increase in profitability of some companies invested in the mining sector such as Maamba Collieries Limited and Kansanshi Mining Plc. Total Group assets increased by 40% to reach ZMW 20,262 million in June 2020, compared to ZMW 519 million in September 2019. This is mainly attributable to the increase in the value of investments in associates due to the improved performance of Kansanshi Mining Plc, Maamba Collieries Limited and currency gains from translating investments denominated into US dollars, ”ZCCM-IH said.

The group added that exploration work is underway with the aim of going gold.

“During the period, Zambia Gold Company Limited (‘ZGCL’), 51% owned by ZCCM-IH and 49% owned by the Ministry of Finance, obtained the small-scale mining grant in the district of Mwinilunga. Exploration and mining work is underway. This is in line with its national mandate to manage gold sector programs and activities along the value chain. ZGCL also continued gold trading during the period, with gold purchases being extended to Rufunsa district. In addition, ZGCL has worked with artisanal miners to form and operationalize artisanal gold mining cooperatives in various districts, ”he said.

On the restructuring of Ndola Lime Company Ltd, ZCCM-IH said that it was recommended that the creditors reconstruction be done and that a new company has since been formed, named Limestone Resources Limited.

“The restructuring has taken place through a hybrid of out-of-court settlements and formal insolvency proceedings.

In this regard, it was decided to undertake an arrangement regime (“e ment”) and creditors reconstruction. The aim of the regime was to create a new society that was free from responsibilities and able to function more efficiently. As a result, the new company was incorporated and is known as Limestone Resources Limited (“LRL”).

In addition, the restructuring involved the transfer of the business and assets from NLC to LRL and the consequent issuance of shares by LRL to shareholders of NLC, ”ZCCM-IH said.

In the Maamba Collieries Limited case, it disclosed that cash of $ 10 million was provided to Maamba Collieries Limited (MCL) on the condition that the amount be payable within 60 days of disbursement, following receipt of the proceeds from the sale of electricity by ZESCO.

However, despite the agreed terms, MCL still has not repaid the advanced sum and, therefore, ZCCM Investments Holdings Plc filed a lawsuit against MCL (during the reporting period) in the Lusaka High Court to claim payment of the US $ 10 million plus damages.

Regarding the Industrial Development Corporation (IDC), ZCCM-IH said that its Board of Directors has reviewed and approved the reorganization exercise proposed by IDC / ZCCM-IH Group under which IDC will transfer its stake of 25 % in Kagem Mining Limited, at fair market value, to ZCCM IH;

ZCCM-IH will transfer its 71.4% interest in Innestrust Bank PLC at fair market value to IDC; and that ZCCM-IH will transfer its 100% interest in Mushe Milling Limited to IDC at fair market value.

“These 3 corporate actions listed above will be undertaken simultaneously as a corporate group reorganization exercise involving IDC and ZCCM-IH and will constitute the project for rationalization and reorganization of the group’s portfolio,” he said. -he declares.

On CEC Africa Investments Limited, ZCCM-IH says it was successful in divesting its 20% stake in the energy company.

The proceeds of the elimination are applied to other opportunities in the mining and other mining sectors of the national economy, ZCCM-IH said.

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